1) Preparation – an acronym approach to preparation and planning is presented below in B. The Framework.

The negotiating style needs to be adapted to the circumstances and the culture. Good-hearted, open, cooperative “win/win” facing a cutthroat shyster litigator from New York may be suicidal. Hard-nosed, obdurate “win/lose” tactics facing highly ethical and extremely conscientious Saudi Arabian or Japanese officials is an equally unlikely prescription for success.

2) Listening - especially active listening is hard to do when one is also thinking of how to couch one’s answer. More common in Asia than in the U.S. and Europe is to have in team negotiations a “designated listener.” This is often the elderly gentleman in the back who takes notes, so quietly that he fades away into the background and is hardly noticed at all. He hardly ever speaks, never interrupts during negotiations. Frequently he is a senior decision maker.

3) Asking – From experience in over thirty countries, asking questions is a negotiating imperative overriding cultural differences. Lack of knowledge may help win a battle (“fools rush in where angels fear to tread”), but is unlikely to win a war – let alone lead to building a solid business relationship. Yet “asking questions” – the right ones, in the right way – is often underestimated, regardless of culture. Why?

First, humans naturally take a subjective viewpoint in a negotiation.We are more oriented towards convincing the other parties of the validity of our, of course completely reasonable, position, than in trying to understand their position. When their position is stated, we give it our divided attention, because half our energy is devoted to preparing our counter-statement, even as they speak.

A corollary is that when asked a question, we tend to answer too fast, spontaneously, above all if we feel we are being challenged.

Second, both parties tend to neglect follow-on questions. Asking “why” once is unlikely to get to the root of an issue. Cascading “why” and “what if” questions are far more likely to lead to resolving issues, breaking deadlocks, creative structuring and lasting deals.

4) Cautiously make the first move, or offer. A standard admonition in negotiating books and seminars is “do not make the first” move, offer or concession. In a “win/lose” negotiation this advice may well be worth heeding. In “win/win” this attitude can be counter-productive, see the subpage “Three Negotiating Myths."

6) Risk & Reality checks Focus on satisfaction for all parties. However realize that seeking the “perfect” outcome can be the enemy of achieving “good” promptly.But that does not imply accepting a marginal deal either, cf. below.

7) Doable deal or Decisively walk away Often people start thinking about BATNA (best alternative to a negotiated agreement) only when the negotiation is well underway – and stalling. Considering when to walk, and towards what one will walk as an alternative, is an integral part of preparation, before negotiating begins.

"Give me six hours to chop down a tree and I will spend the first four sharpening the axe."

Again, be careful not to get carried away! The intellectual challenge of creating the perfect deal, anticipating every contingency, can get in the way of getting on with the business. Amiable parties can easily amend an imperfect contract to respond to changed circumstances. The “perfect” contract can still result in deadlock if the relationship has degenerated into implacable hostility.

Part IV. FOLLOW UP the second most neglected phase

1. PROJECT (the negotiation) VS. PROCESS (the on-going business)

- due diligence

- closing the deal (contract review)

- communicating the deal (management buy-in)

- getting off to a running start (overcoming buyer/seller remorse)

2. BEST PRACTICES (the firm as a learning organization, institutional memory)

- establish procedures for concluded negotiations

... to publicize internally successful approaches

... to learn from mistakes (without “scapegoating”)

3. RELATIONSHIP MAINTENANCE

- coping with change

... external (business and regulatory environment, political issues)

... internal (new CEO, mission, vision, strategy, innovation)

- quanxi*

4. CONFLICT RESOLUTION

- SNAFU*

- Mediation

- Arbitration

- Litigation

SNAFU (der GAU)

S: SituationSituation

N:Needs, theirs and ours Notwendigkeiten und Bedürfnisse,

ihre u. unsere

A:Alternatives and ArbitrationAlternativen u. Schlichtungsverfahren

F:Force and pressureForsche, Druckmittel

U:Umbrellas and thunderstormsUmbruch- und Gewitterschutz

Bridges strongly believes the sine qua non of conflict avoidance is quanxi, closely followed by the ameliorative effect of a binding arbitration clause. The former is explained in the glossary below. The later is treated in the “Note on Arbitration” at “Negotiation Strategy” under “Expertise.”

(One can also build something beautiful out of stones laid in the way.)

GLOSSARY

ASAP – a standard American abbreviation for “as soon as possible.”

BATNA – “best alternative to a negotiated agreement” The term was introduced in Getting to Yes, Negotiating Agreement Without Giving In by Roger Fischer and William Ury, Penguin Books, 1981.

Bogey – In negotiation a bogey is the claim “This is all I have.” The word originally meant a goblin or phantom, an object of dread. In World War II it came to refer to an unidentified plane on the radar screen. The word also refers to a number, budget or other estimated performance figure used by management in planning. Finally, a bogey can be a quota restricting output through the informal agreement of the employees. (Webster’s III).

Boulwarism - a “take it or leave it” offer or counter-offer that is not negotiable. The term stems from Lemuel Boulware, a former vice president of General Electric (GE). He became (in)famous for telling the International Union of Electrical Workers (IUE) at the onset of negotiations that GE had already evaluated the needs of the workers. Consequently he was immediately making GE´s "first, last and best offer.”

Cornelian dilemma -(choix cornélien) is a dilemma in which someone is obliged to choose between two undesirable courses of action. On other words, one has to decide what the lesser of two evils is. In classical drama, the choice is typically between love and honour, or between desireand duty.

The Cornelian dilemma is named after French dramatist Pierre Corneille. In his play Le Cid (1636) the protagonist, Rodrigue, is torn between love and revenge. He wants to avenge his father, who has been wronged the father of the woman he loves, Chimène. Revenge entails losing his love, and inaction entails losing his honor. (Wikipedia, 2010)

CRM – customer relationship management

DCF – discounted cash flow

Hobson´s choice - “a free choice in which only one option is offered. As a person may refuse to take that option the choice is therefore between taking the option or not; "take it or leave it". (Wikipedia, 2010) The etymology is from Thomas Hobson (1544–1631), who owned livery stable owner in Cambridge, England. His customers could only take the horse in the foremost stall, and not a horse from any of the other stalls. (He did this to rotate the use of his horses.)

IRR – internal rate of return (interne Zinsflußmethode)

KFS – “key factors for success” The concept, the forerunner of benchmarking, was introduced by KenichiOhmae in his classic The Mind of a Strategist, The Art of Japanese Management, 1982.

Morton's Fork -is a choice between two equally unpleasant alternatives (i.e. a dilemma), or between two lines of reasoning that lead to the same unpleasant conclusion. The phrases "between the devil and the deep blue sea" or "between a rock and a hard place" convey a similar idea. The etymology comes from from a policy John Morton, Lord Chancellor of England in 1487, under the rule of Henry VII. He devised a perfidious system of tax collection.

If the King´s subject lived in luxury, he obviously had monies to pay taxes. If the subject lived frugally, he must have substantial savings -- and therefore the monies to pay taxes. These arguments were the two prongs of the fork and regardless of whether the subject were rich or poor, he did not have a favorable choice.(Wikipedia, 2010)

NPV – net present value (Kapitalwertmethode)

Quanxi – refers to a Chinese concept that goes far beyond the Western concept of business friendship. Implicit to the tradition of quanxi is that the stronger partner helps the weaker one in times of need. In return, loyalty in hard times is expected. In terms of business, this kind of friendship, trust and help is at odds with a Western reluctance to divulge information about trade secrets. Regardless of the written contract, if circumstances change, each side expects that relief will be granted and that both parties will work together to adapt to change. (Summarized from Chester Karras, “In Business As In Life – You Don’t Get What You Deserve, You Get What You Negotiate”, Stanford St. Press, 1996, p. 4 f.)

SNAFU – “situation normal all fouled up” The term (actually more graphically stated than “fouled up”) was coined by the Seabees in World War II. (The Seabees were a volunteer branch of the Civil Engineer Corps of the U.S. Navy. They were renowned for building – and defending – bridges and airfields under extreme conditions, such as under enemy fire.)

Sibylline Books -are not to be confused with the Sibylline Oracles, twelve books of prophecies thought to be of Judaic-Christian origin. The Sibylline Books were a collection of oracular utterances, purchased from a sibyl* by the last king of Rome, Tarquinius Superbus. They were consulted at momentous crises through the history of the Republic and the Empire. Only fragments have survived, the rest being lost or deliberately destroyed.

“The story of the acquisition of the Sibylline Books by Tarquinius is one of the famous mythic elements of Roman history. The Cumaean Sibyl offered to Tarquinius nine books of these prophecies; and as the king declinedto purchase them, owing to the exorbitant price she demanded, she burned three and offered the remaining six to Tarquinius at the same stiff price, which he again refused, whereupon she burned three more and repeated her offer. Tarquinius then relented and purchased the last three at the full original price and had them preserved in a vault beneath the Capitoline temple of Jupiter.” (Wikipedia, 2010)